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CDJ 2025 Ker HC 1778
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| Court : High Court of Kerala |
| Case No : RFA No. 348 of 2017 |
| Judges: THE HONOURABLE MR. JUSTICE SATHISH NINAN & THE HONOURABLE MR. JUSTICE P. KRISHNA KUMAR |
| Parties : Travancore Devaswom Board, Represented By Its Secretary, Devaswom Board Junction, Thiruvananthapuram & Others Versus O.M. Mathew, Represented By His Power Of Attorney Holder,Beena Kuriakose, Ernakulam |
| Appearing Advocates : For the Appellants: V. Krishna Menon, Latha Anand, M.N. Radhakrishna Menon, K.R. Pramoth Kumar, S. Vishnu, Advocates, K. Anand (SR.). For the Respondent: K. Babu Thomas, Marykutty, Babu, Advocates. |
| Date of Judgment : 11-12-2025 |
| Head Note :- |
Comparative Citation:
2025 KER 95332, |
| Summary :- |
1. Statutes / Acts / Rules Mentioned:
- Section 55 of the Contract Act
2. Catch Words:
- breach of contract
- supplemental agreements
- economic duress
- extra items
- tender deduction
- interest
- damages
- void agreements
3. Summary:
The defendants invited a tender for an additional parking facility and awarded it to the plaintiff at a rate 17.6% below estimate. Delay occurred because the defendants failed to obtain Forest Department permission, causing the plaintiff to redo jungle clearance. The plaintiff executed supplemental agreements under economic duress, which the trial court held void. The trial court granted a decree for various claims but omitted consideration of evidence and tender deduction. On appeal, the higher court examined each claim, allowing amounts for certain heads, applying a 17.6% tender deduction to the total, and fixing interest at 12% per annum till decree and 6% thereafter. The original decree was set aside and a new decree for Rs.2,84,110 with interest was awarded to the plaintiff.
4. Conclusion:
Appeal Allowed |
| Judgment :- |
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Sathish Ninan, J.
1. The decree in a suit for damages on declaring that the defendants committed breach of contract and that the supplemental agreements are void, is under challenge by the defendants.
2. The defendants invited tender for the work of “additional parking facility” at Pamba. The plaintiff was the successful tenderer. The plaintiff's tender was 17.6% below the estimated rate. His offer was accepted on 14.07.1987. The period of the contract was four months, to be reckoned from the date of handing over of the site. The necessary land for the parking ground was obtained only on 01.03.1988. The plaintiff alleged that the work got delayed due to the fault of the defendants in obtaining necessary sanction from the Forest Department. The plaintiff was required to do additional and extra items of work. The plaintiff was required to enter into supplemental agreements, which were got executed on the threat of non- payment of money and are vitiated. The plaintiff sought a declaration that the defendants committed breach of contract, that the supplemental agreements are void, for money for the works done, and for damages.
3. The defendants denied the plaint allegations. It was contended that the payment for the work done was duly made in accordance with the terms of agreement. The allegation of undue influence in causing execution of supplemental agreements, was also denied.
4. The trial court held the defendants responsible for the delay. It was also found that the supplemental agreements were got executed under the coercion. The court proceeded to grant decree except for damages.
5. We have heard Shri.K. Anand, the learned Senior Counsel for the appellants-defendants and Shri.Babu Thomas K., the learned counsel for the respondent-plaintiff.
6. On the materials, the trial court found that, when the defendants invited tender for the work, they did not have permission from the Forest Department for cutting trees; permission was obtained only on 01.03.1988. The site measurement could be taken only after cutting and removing the trees. Though the plaintiff had taken steps for clearing jungle growth in the proposed work site, it was objected to by the Forest Department. Thus, it was found that the defendants were at fault. However, the trial court found that the plaintiff having not opted to repudiate the work under Section 55 of the Contract Act and that having chosen to proceed with the contract, he is not entitled for damages. There is no appeal by the plaintiff.
7. Five supplemental agreements were executed by the plaintiff. The agreements relate to extension of time and for extra works. It is the definite case of the plaintiff that, execution of such agreements were caused on withholding the amounts payable to the plaintiff. On appreciating the evidence in extenso, the trial court found that the execution of the agreements was not voluntary, but was under economic duress. The court held the supplemental agreements to be vitiated.
8. Though the learned Senior Counsel took us through the findings of the trial court on the above aspects, no materials could be placed before us to substantiate the findings to be erroneous.
9. The main argument of the learned Senior Counsel is that the trial court, after proceeding to find that the defendants were responsible for the delay and that the supplemental agreements are vitiated, the court, without any consideration of the evidence on record, straightaway proceeded to accept the other claims of the plaintiff. The decree is unsustainable on the evidence on record, it is argued. It is further argued that, the plaintiff's claim is, at any rate, to be subjected to deduction of 17.6%, he having quoted such percentage below the estimated rate. The decree granted is without applying such deduction. On the said ground also, the decree is liable to be set aside, it is contended.
10. We do notice that there is force in the contention of the learned Senior Counsel that there had been no discussion by the trial court as to whether the claims raised have been substantiated on the evidence. The court proceeded to grant a decree in respect of claims (a) to (j), out of the various heads of claims raised at paragraph 31(iii) of the plaint. The remaining claims under (k) to (o), under the head of damages, were disallowed. The counsel on either side were heard elaborately with regard to the merits of the claims under the heads (a) to (j). We proceed to consider the claims one by one.
11. The claim under head (a) reads thus;
“a). Rs.6,468/- towards expenditure incurred in clearing the jungle for the 2nd time.”
According to the plaintiff, though initially the plaintiff had done jungle clearance works, for lack of necessary permission from the Forest Department, the works could not be proceeded. It is only after 01.03.1988, on obtaining permission from the Forest Department that the works could be commenced. This necessitated the clearance of jungle growth for the second time. However, the expenses incurred for the jungle clearance for the second time was not paid, it is claimed.
12. The plaint allegation about the work of jungle clearance for the second time, is not disputed in the written statement. Page No.1 of Ext.B3 measurement book mentions about the jungle clearance for an area of 42,400 sq.meters having been measured on 30.05.1988. Page No.8 of Ext.B3, dated 22.10.1988, makes further mention of jungle clearance, the area of which is seen limited to 12,000 sq.meters. There is sufficient indication that, consequent to the delay caused, the plaintiff had to do the work of jungle clearance for the second time, at least for 12,000 sq.meters area. The agreed rate for the jungle clearance is Rs.53.90/- per 100 sq.meters. Therefore, for 12,000 sq.meters, the amount payable is Rs.6,468/- as claimed by the plaintiff. We hold that the plaintiff is entitled for the said amount.
13. The claim under clause (b) reads thus;
“b). Rs.80,312/- towards formation approach road leading from the existing parking ground to the new parking ground involving excavation of 2500m3 of hard soil/hard narikkal, etc.”
The claim is for the expenditure for construction of an approach road. Admittedly, it is not an item of work included in the agreement. The plaintiff claims it to be an extra item of work. There is no document requiring the plaintiff to carryout such an extra item of work. The ‘Note’ to clause 10 in the notice inviting tenders, which is marked as Ext.B2 (b), specifically provides that the Department does not undertake to construct or make available any approach road to the site. The Note reads thus;
“Note:- The department does not undertake to construct or make available any approach road or other means of approach to the proposed work site and the tenderer shall get acquainted with the available means of approaches to the proposed site and quote for the various items. The Department shall not be liable for any claim raised later on the plea of non-availability or non-access to the site.”
In the light of the above mentioned clause, so long as it is not a work awarded to the plaintiff as an extra item of work, the mere fact that the plaintiff may have formed an approach road for his access to the site, will not entitle him for the recovery of its cost from the defendants. It having not been established that the work was done as an extra item of work as demanded by the defendants, the claim is bound to fail.
14. The claim under clause (c) reads thus;
“c). Rs.1,33,834/- towards unpaid value for 1018-143m3 soft wood trees felled, logs conveyed and placed engaging elephants at Rs.131.45/m3 being unpaid.”
The claim relates to felling of trees and for conveyance of the timber. Admittedly, it is an extra item of work not included in the agreement. Going by Ext.B3 measurement book, the total quantity is 1018.143 cubic meters. The plaintiff has been paid at the rate of Rs.70.55/- per cubic meter. The Commissioner in Ext.C2 report stated that the rate to be paid is Rs. 114/- per cubic meter. However, Ext.B6 file relating to the work in question maintained by the defendants, at Page No.108, contains the data as per the current schedule of rates of the Forest Department. For transportation of logs using elephants and stacking, the amount mentioned therein is Rs.288.23/- per cubic meter. We find no reason to not accept the said rate. As noticed, the plaintiff has paid only Rs.70.55/- per cubic meter. After deducting the same, the plaintiff is entitled to a further amount of Rs.2,21,629.40/- [(288.23 - 70.55) x 1018.143].
15. The claim under clause (d) reads thus;
“d). Rs.2,33,805/- towards cutting in size 867.07m3 of wooden logs from trees felled and conveying upto 750 meters and stacking at Rs.269.65/m3 being unpaid value.”
The head deals with cutting of timber, conveyance and stacking. Admittedly, this is also an extra item of work. The quantity involved is 867.07 cubic meters. The plaintiff was paid at the rate of Rs.42.35/- per cubic meter. The plaintiff claims that he is entitled for Rs.312/- per cubic meter. However, but for bald claim, there is no data to substantiate the rate. Therefore, the plaintiff is not entitled for any amount under the said claim.
16. The claim under clause (e) reads thus;
“e). Rs.36,416/- for re-conveying 867.07m3 of wooden logs from the river bed of Pamba in the rainy season at Rs.42/m3.”
Evidently, the claim is for re-conveyance of the wooden logs from the river bed. Ext.A11 is the communication issued by the 3rd defendant to the plaintiff in the said regard. Ext.A11 suggested that it was a folly on the part of the plaintiff to have stacked the timber logs at the river bed and required it to be shifted therefrom. It further contained an assurance that he will be paid as per the conditions stipulated in the tender and agreement. That the plaintiff carried out the work, is not in dispute. The quantity involved is reflected in Ext.B3. It is 867.07 cubic meters. No amounts were paid to the plaintiff by the defendants under the said claim. The plaintiff claims Rs.42/- per cubic meter. This is placing reliance on Entry 7 (b) at page Nos.18 and 19 of Ext.B3 measurement book, which relates to ‘conveying and stacking of fire wood by head-load after cutting it into pieces’ for which the rate mentioned is Rs.53.90/- per cubic meter. Evidently, the said work involves not only conveyance, but also cutting of timber into pieces. In the circumstances and in the absence of any contra evidence, we are constrained to fix the rate at Rs.25/- per cubic meter for the expenses for re-conveyance. The plaintiff is entitled for an amount of Rs.21,676.75/- [867.07 x 25].
17. The next item of claim under clause (f) reads thus;
“f). Rs.1,60,118/- for 5274.438m3 of hard narikkal beneath 30 c.m. at Rs.303.10/10m3 being unpaid value.”
The claim is for the work of excavation of hard narikkal below the depth of 30 c.m. It is the plaintiff's claim that, beyond the depth of 30 c.m., there was hard narikkal and the plaintiff had to remove 7446.43 cubic meters of narikkal. The defendants dispute the claim that so much quantity of narikkal was removed beyond 30 c.m. of depth. They awarded Rs.79.15/- per 10 cubic meter (Rs.7.915/- per cubic meter) for the quantity, considering it to be ordinary soil. In the schedule to Ext.B2 agreement, the rate fixed for removal of hard narikkal is Rs.382.25 per 10 cubic meter. The plaintiff claims that he is entitled for the said rate.
18. There is no material to find that there was hard narikkal after the depth of 30 c.m. The claim of the plaintiff is not liable to be accepted as such. However, considering the terrain and the location, it is only probable that, beyond the depth of 30 c.m. there would have been hard soil. Going by Ext.B3 measurement book, the rate for hard soil is Rs.138.30 per 10 cubic meter (Rs.13.830 per cubic meter). We are of the opinion that the plaintiff is entitled for the said rate for the quantity of 7446.438 cubic meters. The plaintiff is entitled for Rs.44,045.6807 [7446.438 x 5.915 (13.830 – 7.91)] under the head.
19. The next head of claim under clause (g) reads thus;
“g). Rs.3,78,151/- for 15,505m3 ofhard narikkal removed at Rs.243.95/ 10m3 being unpaid.”
The claim is for excavation of hard narikkal for a quantity of 15505.22 cubic meters. Removal of narikkal is an item of work included as serial No.6 in the schedule to Ext.B2 agreement. Page 24 of Ext.B3 measurment book mentions about excavation of Narikkal. The quantity mentioned therein is 18546.995. The rate fixed is Rs.382.25 per 10 cubic meters. There is no case that the said amount has not been paid. The further claim for a quantity of 15505.22 cubic meters is not substantiated. Going by the entry as item 5(b) in Ext.B3 at page 23, the said quantity is hard soil and not narikkal. The claim is bound to fail.
20. The claim under clauses (h) and (i) go together and read thus;
“h). Rs.53,640/- towards expenditure at Rs.79.15/10m3 being unpaid for removing 6777.1m3 of slipped earth out of Rs.153.95/10m3.
i). Rs.49,589/- towards value ignored of 3222.9m3 of slipped earth at Rs.153.95/10m3.”
According to the plaintiff, the total quantity of slipped earth and bolders is 10,000 cubic meters. The quantity accepted by the defendants is only 6777.1 cubic meters. It is evident from page No.25 of Ext.B3 measurement book that the plaintiff has been paid at the rate of 74.80/- per 10 cubic meters. The plaintiff claims at the rate of Rs.153.90 per 10 cubic meters. However, there is no data to substantiate the rate claimed.
21. So also, though the plaintiff claims a total quantity is 10,000 cubic meters, Ext.B3 reflects only 6777.10 cubic meters. We do notice that, as per Exts.A19, A21 and A23 communications, the plaintiff had repeatedly intimated the defendants that the quantity of earth involved is 10,000 cubic meters. The said claim was not refuted by any communication. In the circumstances as above, we are constrained to accept that the total quantity involved is 10,000 cubic meters. The plaintiff having been granted the cost for only 6777.902 cubic meters, we hold that he is entitled for payment at the rate of 74.80/- per 10 cubic meters for the balance quantity of 3222.9 cubic meters. The plaintiff is entitled for Rs.24,107/- [3222.9 x 74.80 per 10 cubic meter].
22. The last head of claim under clause (j) reads thus;
“j). Rs.3,74,400/- for blasting and removing 3120m3 of hard rock under protected conditions at Rs.1200/10m3 value omitted.”
The claim is for the expenses of blasting of hard rock. It is an extra item of work. The plaintiff claims that 3120 cubic meters of hard rock was blasted. The plaintiff claims that he is entitled for the expenses at the rate of Rs.1200/- per 10 cubic meter. At page No.23 of Ext.B3 measurement book, the quantity of rock is recorded as 359.17 cubic meters. The expert commissioner in Ext.C2 report stated quantity of blasted stones will come to 360 cubic meters and the rate for the same is Rs. 746.30 per 10 cubic meters. Therefore, the plaintiff is entitled for Rs. 26,867/- (360 x 74.630).
23. Thus, the plaintiff is entitled for the amounts under the heads in clauses (a), (c), (e), (f), (h), (i) and (j) as shown therein.
24. Now, we proceed to consider the defendants' contention that, to the total value, tender deduction of 17.6%, as quoted by the plaintiff, is to be applied. To consider the issue, what is relevant is clauses 23.3 (iii), (iv) and (v). The clauses read thus;
“(iii) In the case of extra items, whether altered or substituted and for which similar items do not exist in the contract and rates exist in the schedule of rates, the rate shall be arrived at on the basis of the Departmental data rate current at the time or ordering the extra item, after applying the tender deduction except on cost of departmental material Tender excess , if any, will not be applied.
(iv) In the case of additional items, the rates shall be arrived at on the basis of the departmental data rates current at the time of ordering the extra item, or the date of commencement of the extra item, whichever is earlier, after applying the tender deduction except on the cost of departmental material. Tender excess, if any, will not be applied.
(v) In the case of extra items, whether additional altered or substituted, for which the rates cannot be derived from similar items in the contract, and only partly from the departmental schedule of rate, the rates for such part or parts of items as are not covered in the schedule of rates shall be determined by the Engineer on the basis of the prevailing market rates giving due consideration to the analysis of the rates furnished by the contractor with supporting documents, including contractor's profit. This shall be added on to the departmental rate (including contractor's profit) current at the time of ordering or executing the extra item, whichever is earlier, for the other part of the item, for which rates can be derived from the schedule of rates.”
The clauses referred to above indicate that, if the rates of extra, additional or altered items can be derived from the similar items in the contract, tender deduction can be applied. None of the works under the heads noted supra can be said to be works in respect of which the rates could not be derived from similar items of the contract. Therefore, the tender deduction is liable to be applied.
25. Applying tender deduction to the total amount of Rs.3,44,794/-, the amount payable to the plaintiff is Rs.2,84,110/- [3,44,794 - ( 3,44,794 x 17.6%)].
26. Though the plaintiff has claimed interest at the rate of 18.5% for the amounts payable, considering the prevailing commercial rate of interest in banking transactions, we hold that the plaintiff is entitled for interest at the rate of 12% per annum from the date of suit till the date of decree and thereafter at the rate of 6% per annum thereafter.
In the result the appeal is allowed in part. Setting aside the decree and judgment of the trial court a decree is passed allowing the plaintiff to realise an amount of Rs.2,84,110/- with interest at the rate of 12% per annum from the date of suit till the date of decree and thereafter at the rate of 6% till realisation from the first defendant.
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